U.S. crude stockpiles fell last week despite a hefty build at the Cushing, Okla., hub while gasoline and distillate inventories rose as refining rates picked up, the U.S. Energy Information Administration (EIA) said on Dec. 7.
Crude inventories fell 2.4 million barrels (MMbbl) in the week ended Dec. 2, compared with analyst expectations for a draw of 1 MMbbl.
A heavy decline in U.S. Gulf Coast inventories pulled overall crude stocks down, as the PADD 3 region saw a 6.9 MMbbl drawdown.
Crude stocks at the Cushing delivery hub for West Texas Intermediate (WTI), however, jumped by 3.8 MMbbl, EIA said.
Prices across the energy complex fell on the data, pointing to the larger-than-expected increase in product inventories in what has so far been a mild December across most of the U.S.
"The report was bearish despite the overall crude oil drawdown," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
"Refined product inventories rose by a substantial amount, due to elevated refining activity, back above 90% utilization, and lowered demand, especially for gasoline," Kilduff added.
Refinery crude runs rose 134,000 barrels per day as utilization rates gained 0.6 percentage point to 90.4% of total capacity, EIA data showed.
Gasoline stocks rose 3.4 MMbbl, compared with analysts' expectations in a Reuters poll for a 1.9 MMbbl gain.
Distillate stockpiles, which include diesel and heating oil, increased by 2.5 MMbbl, vs. expectations for a 1.8 MMbbl increase, the EIA data showed.
"The solid builds to the products, despite being a seasonal trend, are helping to usher the crude complex lower," said Matt Smith, director of commodity research at ClipperData in Louisville, Ky.
By 9:50 a.m. CT (15:50 GMT), WTI fell 94 cents, or 1.8%, to $49.99/bbl, while Brent crude was down 1.3%, or 72 cents, to $53.21/bbl. U.S. RBOB gasoline dropped 1.3% to $1.516 a gallon.
U.S. crude imports rose last week by 730,000 bbl/d.
Recommended Reading
Help Wanted (Badly): Attracting Workers to Energy is Becoming Difficult
2024-03-27 - Attracting workers to the energy industry is becoming a difficult job, despite forecasted growth in the industry.
Stena Evolution Upgrade Planned for Sparta Ops
2024-03-27 - The seventh-gen drillship will be upgraded with a 20,000-psi equipment package starting in 2026.
Petrobras to Step Up Exploration with $7.5B in Capex, CEO Says
2024-03-26 - Petrobras CEO Jean Paul Prates said the company is considering exploration opportunities from the Equatorial margin of South America to West Africa.
E&P Highlights: March 25, 2024
2024-03-25 - Here’s a roundup of the latest E&P headlines, including a FEED planned for Venus and new contract awards.
TotalEnergies Restarts Gas Production at Tyra Hub in Danish North Sea
2024-03-22 - TotalEnergies said the Tyra hub will produce 5.7 MMcm of gas and 22,000 bbl/d of condensate.